Given That the Cost of Common Stock Is 18 Percent

question 127

Multiple Choice

Given that the cost of common stock is 18 percent, dividends are $1.50 per share and the price of the stock is $12.50 per share, what is the annual growth rate of dividends?

• A) 4 percent
• B) 5 percent
• C) 6 percent
• D) 8 percent

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Definitions:

Postconventional Level

A stage in Kohlberg's theory of moral development in which individuals make ethical decisions based on universal principles of justice that transcend their own personal or cultural preferences.

Abstract Principles

Fundamental ideas or concepts that are not tied to specific, tangible instances but apply broadly across different situations.

Preoperational Stage

A stage in Piaget’s theory of cognitive development (ages 2-7) where children begin to engage in symbolic play but don't yet comprehend concrete logic.

Concrete Operations Stage

Piaget’s third stage of cognitive development, in which the school-age child becomes capable of logical thought processes but is not yet capable of abstract thinking.